[Solved] ( A)Define and illustrate graphically average-cost pricing and marginal-cost pricing. Negative Externalities: Negative effects or costs that are incurred by third parties as a result of economic activities, for which they are not compensated, such as pollution. Equilibrium: Equilibrium represents a state of balance where there is no net tendency for change, often used to describe the point at which market supply and demand balances each other. External Benefits: Positive effects that an activity or transaction has on individuals or entities who are not directly involved in the activity, often justifying government intervention or subsidies. Allocative Efficiency: A state of resource allocation where resources are distributed according to consumer preferences, leading to optimal production levels and pricing.

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question 28

Essay

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A)Define and illustrate graphically average-cost pricing and marginal-cost pricing.

Definitions:

Negative Externalities

Negative effects or costs that are incurred by third parties as a result of economic activities, for which they are not compensated, such as pollution.

Equilibrium

Equilibrium represents a state of balance where there is no net tendency for change, often used to describe the point at which market supply and demand balances each other.

External Benefits

Positive effects that an activity or transaction has on individuals or entities who are not directly involved in the activity, often justifying government intervention or subsidies.

Allocative Efficiency

A state of resource allocation where resources are distributed according to consumer preferences, leading to optimal production levels and pricing.